Meaning And Significance Of The National Debt
Economics notes
Meaning And Significance Of The National Debt
➡️ A government budget deficit occurs when the government spends more money than it receives in revenue. This results in an increase in the national debt.
➡️ A government budget surplus occurs when the government receives more money than it spends. This results in a decrease in the national debt.
➡️ A government budget deficit or surplus can have a significant impact on the economy, as it affects the amount of money available for government spending and investment.
What is the meaning of the national debt?
The national debt is the total amount of money that a government owes to its creditors. It is the sum of all the money that the government has borrowed from other countries, institutions, and individuals. The national debt is usually expressed as a percentage of the country's Gross Domestic Product (GDP).
What is the significance of the national debt?
The national debt is an important indicator of a country's economic health. It can be used to measure the government's ability to pay its debts and to assess the overall fiscal health of the country. The national debt can also be used to assess the government's ability to finance public services and infrastructure.
How does the national debt affect the economy?
The national debt can have a significant impact on the economy. High levels of debt can lead to higher interest rates, which can make it more difficult for businesses to borrow money and invest in new projects. High levels of debt can also lead to higher taxes, which can reduce consumer spending and slow economic growth.